Structured Settlements in the United States

The United States has enacted structured settlement laws and regulations at both the federal and state levels. Federal structured settlement laws include sections of the Federal Internal Revenue Code. State structured settlement laws include structured settlement protection statutes and periodic payment of judgment statutes. Medicaid and Medicare laws and regulations impact structured settlements. To preserve a claimant’s Medicare and Medicaid benefits, structured settlement payments may be incorporated into “Medicare Set Aside Arrangements” the “Special Needs Trusts”.

Definitions
The United States definition of “structured settlement” for Federal income taxation purposes, found in Internal Revenue Code Section 5891(c)(1), is an "arrangement" that meets the following requirements:
A structured settlement must be established by:
A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2); or
An agreement for the periodic payment of compensation under any workers’ compensation law excludable under Internal Revenue Code Section 104(a)(1); and
The periodic payments must be of the character described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c)(2) and must be payable by a person who:
Is a party to the suit or agreement or to a workers' compensation claim; or
By a person who has assumed the liability for such periodic payments under a Qualified Assignment in accordance with Internal Revenue Code Section 13
Legal Structure
The typical structured settlement arises and is structured as follows: An injured party (the claimant) settles a tort suit with the defendant (or its insurance carrier) pursuant to a settlement agreement that provides that, in exchange for the claimant's securing the dismissal of the lawsuit, the defendant (or, more commonly, its insurer) agrees to make a series of periodic payments over time. The insurer, a property/casualty insurance company, thus finds itself with a long-term payment obligation to the claimant. To fund this obligation, the property/casualty insurer generally takes one of two typical approaches: It either purchases an annuity from a life insurance company (an arrangement called a "buy and hold" case) or it assigns (or, more properly, delegates) its periodic payment obligation to a third party which in turn purchases an annuity (which arrangement is called an "assigned case").
In an unassigned case, the property/casualty insurer retains the periodic payment obligation and funds it by purchasing an annuity from a life insurance company, thereby offsetting its obligation with a matching asset. The payment stream purchased under the annuity matches exactly, in timing and amounts, the periodic payments agreed to in the settlement agreement. The property/casualty company owns the annuity and names the claimant as the payee under the annuity, thereby directing the annuity issuer to send payments directly to the claimant. If any of the periodic payments are life-contingent (i.e., the obligation to make a payment is contingent on someone continuing to be alive), then the claimant (or whoever is determined to be the measuring life) is named as the annuitant or measuring life under the annuity.
In an assigned case, the property/casualty company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the property/casualty insurer transfers the obligation, through a legal device called a qualified assignment, to a third party. The third party, called an assignment company, will require the property/casualty company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation. If the claimant consents to the transfer of the periodic payment obligation (either in the settlement agreement or, failing that, in a special form of qualified assignment known as a qualified assignment and release), the defendant and/or its property/casualty company has no further liability to make the periodic payments. This method of substituting the obliger is desirable for property/casualty companies that do not want to retain the periodic payment obligation on their books. Typically, an assignment company is an affiliate of the life insurance company from which the annuity is purchased.
An assignment is said to be "qualified" if it satisfies the criteria set forth in Internal Revenue Code Section 130 [1]. Qualification of the assignment is important to assignment companies because without it the amount they receive to induce them to accept periodic payment obligations would be considered income for federal income tax purposes. If an assignment qualifies under Section 130, however, the amount received is excluded from the income of the assignment company. This provision of the tax code was enacted to encourage assigned cases; without it, assignment companies would owe federal income taxes but would typically have no source from which to make the payments.

Structured settlement

A structured settlement is a financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including: Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions, rules and standards for structured settlement. Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called “periodic payments”. A structured settlement incorporated into a trial judgment is called a “periodic payment judgment”.

How do I know if I'm paying too much for my life insurance?

If you bought your life insurance policy more than a few years ago, you may be paying too much. Why? Because life insurance rates within the last decade have come down dramatically. Checking whether or not you're paying too much is easy. Just visit a life insurance brokerage firm's website like AccuQuote or Term4Sale to compare rates from hundreds of companies. After checking these sites and doing a little price comparison, if you think you're paying be sure to call for a more accurate quote. You may even want to go through the application process to see what offer the life insurance company comes back with. This is FREE to do - at no cost to you. But remember to keep your existing policy in force. DO NOT cancel it until you are 100% sure that the new policy is less expensive and you are approved.

What is the difference between level term life insurance and guaranteed level term?

Term insurance is, by definition, temporary insurance. Each year, a premium is paid to cover the risk of death during that year. Term insurance has no cash value. The only way to collect anything is to die during the term. If death occurs, the beneficiary generally collects the face amount (death benefit) of the policy, free of income tax.

Historically, term insurance premiums increased each year, as the risk of death became greater. While unpopular, this type of coverage is still available and is commonly referred to as annually renewable term (ART).

Guaranteed level premium term have become very popular because the premiums are designed to remain level for a period of 5, 10, 15, 20, 25 or even 30 years. These policies have become extremely popular because they are very inexpensive and can provide relatively long term coverage. But, be careful! Most level premium term policies contain a guarantee of level premiums, however some policies don't provide such guarantees. Without a guarantee, the insurance company can surprise you by raising your premiums, even during the time in which you expected your premiums to remain level. Needless to say, it is important to make sure that you understand the terms of any insurance policy you are considering.

Where is the best place to buy term life insurance?

The best place to buy term life insurance is the from the company that provides you with the least expensive premium. Most products are the same company to company, but the underwriting guidelines are different. For instance, if you have a family history of cancer, one company may charge you more. So, the key is to buy life insurance from the company that deals with your particular situation whether it's a health condition, family history or risky behavior such as piloting.

So how do you find out which company is best for you? I would suggest shopping online. Often times, people are scared of using the Internet for financial transactions. What most people don't realize is when they use the Internet for life insurance most of the time they can't really "purchase online". They must talk to a licensed agent and fill out physical paperwork before they are able to buy. They can get price quotes online, but that's about all.

As premiums go down, pick up life insurance

This has been a hot topic among reporters lately and I wanted to share this article with you to help stress the fact that life insurance is cheaper than it's ever been in history. This article, written by Sandra Block (a USA Today reporter) was posted in the Courier Post online:
The next time your party guests linger past your bedtime, ask them how they feel about life insurance. Watch that they don't trip over your cat as they sprint to the door.
Nobody wants to talk about life insurance. But if you have young children or others who depend on you, you should have it.

Millions of Americans have no life insurance, and millions more don't have enough to provide financial security for their loved ones. That's a shame, because if you're reasonably healthy, you can buy a lot of life insurance without spending a lot of money. Average premiums for individual life insurance have been falling about 5 percent a year since 2000, and they're expected to drop an additional 4 percent in 2007, according to the Insurance Information Institute.
"The rates are as low as I've ever seen," says Byron Udell, CEO of AccuQuote, an online insurance broker.

Some tips for buying life insurance:
To save money, buy term insurance. There are two types of life insurance: term and permanent. Term provides a benefit only if you die during the period covered by the policy. Permanent life insurance remains in effect as long as you pay the premiums. Part of the premium goes into an investment account. You can withdraw some of that money or borrow against your policy.

Don't rely on your employer's life insurance policy. Many companies offer life insurance as a benefit, but it's usually not enough to provide financial security for your family, Kalen says. Most workplace policies cover one to two times your annual salary. Financial planners generally recommend buying enough insurance to replace seven to 10 times your annual salary.

If you have health problems, don't assume you're uninsurable. Advances in the treatment of cancer and other diseases have led insurers to lower premiums for people once considered high-risk. In the past year, Hartford has reduced premiums for women who have been treated for early-stage breast cancer and men who have had surgery for moderate levels of prostate cancer. Prudential announced last week that it will lower premiums for people who have been successfully treated for heart disease

What should I look for in a disability insurance policy?

There are many things you should be aware of when shopping for a disibility insurance policy. The best thing to do is talk to an agent that can help you determine what is best for you. However, here are some things to keep in mind:

Defininition of a disability - policies vary. Some pay benefits if you are unable to perform the dutities of your regular occupation, while others pay only if you can engage in no gainful employment at all.

Extent of disability

Presumptive disability - under some policies, even if you can still perform some or all of your regular job, you may be presumed fully disabiled and entitled to full benfits under certain specified conditions, such as loss of sight, speech, hearing or use of limbs.

Amount of Benefits

When payment begins

Length of coverage

Waiver or premium - if you've been disabled for more than 90 days you don't have to pay any more premium until your disability ends.

Non cancelable versus guaranteed renewal - be sure that coverage will continue. Ask about renewability.

The most important thing to ask about is what the policy does and does not cover. Again, be sure to speak with an agent that can help you figure out the best policy for you.

How often should I review my life insurance policy?

It's a good idea to review your life insurance policy every two to three years. Life changes and so will your life insurance needs. An obvious example is if you have a new baby. But your life insurance needs will also change if you buy a new home or even get a raise. Life insurance is so inexpensive today there is no reason why you shouldn't have at least 10 times your income. However, to get a more precise idea of how much you need, check out a life insurance needs calculator. You can use ours or find another on the web. Make it a habit to review your life insurance policy as you would review or re-balance your portfolio

Is it easy to make a life insurance claim?

The insurance companies try to make this as easy as possible for you. They realize that it's a very emotional and difficult time when a loved one passes. If you have your insurance policy or policy number handy when you call, it will make it easier to provide assistance. But if you don't have it, don't worry, the insurance will still be able to care for and assist you in your time of need. In general: You will have to complete a form. If you don't have the form, don't worry, the insurance company will send you one upon request. You will have to obtain a death certificate and the birth certificate of the person who has passed away. You might need to ask the physician to complete a form. You will need to submit your claim within a certain period of time. This timeframe varies by type of insurance, and will be outlined in your policy.

What is a flexible premium life insurance policy?

A flexible premium life insurance policy is a policy that has an initial premium with flexible premiums thereafter. What does this mean? A policyowner can select both the future amount and frequency of premiums, or can stop and start premium payments at his or her discretion. Variable universal life is a type of flexible premium life insurance policy which provides life insurance protection with long-term investment growth potential of the policy's account value. You may increase or decrease planned periodic premium payments, skip premiums or make additional premium payments within limits. You may also increase, subject to insurability, or decrease, within limits, your coverage without having to purchase a new policy

How do I know if I need life insurance?

The main reason to buy life insurance is to help replace your income and provide financial security for your dependents. you are the primary earner in your household and people depend on your income, life insurance can help replace that income if you die. The most commonly recognized case of this is parents with young children. However, it can also apply to couples in which the survivor would be financially stricken by the income lost through the death of a partner, and to dependent adults, such as parents, disabled relatives, siblings or adult children who continue to rely on you financially. However, many financial experts consider a life insurance policy to be the cornerstone of sound financial planning. A solid life insurance policy can be used to: Create an inheritance for your heirs by naming them as your beneficiaries. Pay federal and state inheritance and estate taxes. Life insurance benefits can pay estate taxes and settlement costs so that your heirs will not have to liquidate other assets or take a smaller inheritance. Make Create a source of savings. Some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner's request

Business Insurance Introduction

While the success of your business will largely be dependent on your work ethic and innovation, there are a number of events that can occur which will reduce both your profits and your ability to operate your business. To make sure your business and profits are protected, you will want to set up the right type of insurance. For businesses, this is called business insurance.

To purchase business insurance, you will first need to find an agent. There are a number of tips you will want to follow to make sure this is done correctly. You can start by asking your friends or family about the insurance agents they use.

Another option is to call the agent for your personal insurance company. Get their advice on the type of insurance you should use for your business. More than likely they will be able to give you some useful advice. In addition to agents who work for your personal insurance company, you may also want to contact business trade associations to find out if they offer an insurance program that is designed for businesses. There is a strong possibility that they will be able to provide you with a list of companies that specialize in setting up insurance for your business. When you are looking for a good company, price is not the only option you will want to look at. You will also want to look at the level of service offered, along with the history of the company.

When you are selecting an insurance agent, it is important to make sure you pick someone who has a detailed knowledge of the field. They should be able to meet the needs of your company. The agent that you pick must be able to provide you with useful information about injuries, theft, or other things that can contribute to you either losing your business or significant profits. Many people hate to deal with insurance because of the costs involved. However, there are a number of things you can do in order to save money. The first thing you will want to do is shop around. Do not accept the first deal that is offered to you.

There are a number of places online where you can make comparisons between companies that offer business insurance. In addition to the internet, you may also want to get consumer magazines on the subject.


The prices for different companies may vary greatly, and you will want to make sure you find the best deal available. Find the companies that cater to your business. Once you have a list of these companies, you will want to contact them and make comparisons between their prices and level of coverage. Contacting them will also give you information about the quality of their customer service. It is also important to pick a company that has a good reputation. It should be a company that is well established. There are some insurance companies which are fly-by-night operations. They will be here today, but gone tomorrow. You should only do business with companies that have demonstrated excellent customer service

Online Health Insurance Quote: Get a Policy at an Instant

The best way to avail a health insurance policy is to apply for health insurance quotes as provided by different companies online. Since these quotes comes free of cost, you can conveniently apply for as many quotes as possible through online and later on choose the best health insurance policy for you as well as your family members.

A healthy body is the gateway to a healthy mind. Without a healthy body, you would not be able to live a peaceful and a contended life. So you must take good care of your health and if any minor ailments affect you, you must definitely consult a specialist. You may never know when these simple ailments turn into complications. But since the costs of medical treatments are on a rise these days, you will never know when you have to shell out hundreds and thousands of pounds of the treatments. To evade this, you must insure your health with a health insurance policy and let the cost of the treatments be taken care of by the policy.

Normally, there are two types of health insurance policies: Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). Through HMOs you can go to the specialists and doctors that have been provided by the insurance provider. But with PPOs you can go to your own preferred doctors and specialists. You can choose the type of health insurance policies that suits you the best and this can be done by applying for quotes online.

A health insurance policy will give you the covers of the cost of your routine checkups, emergency treatments, prescribed medicines, x-rays, lab fees etc.

Now, the question comes, how to avail the best health insurance policy and cover? This can be done by going online and collecting various health insurance quotes that these companies provide for free. You can get a quote for each of the policies mentioned above. After that, you can do a comparative study of all these quotes and later on choose a perfect health insurance policy online.

Online method of applying for quotes won't involve much of your time and thus you can avoid long awaiting queues. You can just sit in front of your computer and browse through the pages of different websites. Then apply for quotes from these websites online. So without any delay get an online health insurance quotes for free and avail yourself a suitable health insurance policy for you as well as your family.

Life Insurance And Having A Child

Life insurance isn't what most people think about when they're having a baby. But protecting your child has more to do than just having a good supply of food, shelter and diapers. You need to think about them in case you're no longer around. And that means life insurance. Even if you already have life insurance, now's a good time to shop around because premiums are decreasing. Here are some things to think about.

A new baby also means another person depending on your income. Life insurance is designed to replace that income if something should happen to you. As hard as it is to think about, it's really an act of love to make sure your children are financially protected in case of the unthinkable.

It's a common question. How much life insurance is enough? Well, it depends on several factors including your assets, your debts and more. One way to help you figure out a good starting figure for coverage is to:

1. Estimate what your family's monthly expenses would be.

2. Add in your mortgage balance and other debts.

3. Add in estimated future expenses such as funeral expenses and college tuition.

Once you have that figure, subtract out Social Security benefits, other life insurance policies, your spouse's income, and retirement plan benefits. This will give you a good idea of the minimum coverage needed to provide financial relief for your family.

Don't just buy the first life insurance policy you get a quote on. It's important to do some comparison shopping to make sure you're getting the best value for your situation, because life insurance rates vary between life insurance companies. You want to get at least three different quotes to compare against each other.

You may already have a life insurance policy from your employer. That's good but you still may want to add to that once your child is born by increasing the coverage or taking out an additional policy. You probably can find a good value on additional and affordable life insurance just by shopping around.

Should I get Insurance - life term policy quote

An Insurance policy is a very significant financial decision. People are looking for life insurance, Auto Insurance, Homeowners Insurance, even Health Insurance needs. Getting a life term insurance quote is something like you are deciding your life expectancy!! Sure, it is known by the name of life insurance, but shall we call it a death insurance quote!

The sales person selling the insurance policy asks you, "Who will look after your family if you met an accident tomorrow while going to office?", isn't it ridiculous? Well, it's not.....things are really bad. Getting a life insurance has become very important for every body. Getting a life term insurance quote is much easier, thanks to Internet. Life insurance companies are now ready to serve their customers online, saving form the hassle of meetings and discussions without ever talking to a representative. You can easily get a universal life insurance quote in some seconds now!. And you can do it all from the comfort of home.

There are some points to remember while getting an online insurance quote or an instant life term insurance quote. 1. Be Exact: it is necessary that you should have accurate information about your life term insurance quote, try not to hide any particulars, the more accurate your life quote will be. Never hide information like whether or not you smoke. This is important because the life insurance companies will provide you with obligations in the event of your death, so it wouldn't even make sense to have insurance if you?re not as accurate as possible.

2. Never Base Your Choices on Price Alone: Low prices are always attractive, but find out for sure that a policy will suit your needs. Ask for the details involved in Universal life insurance quoteand whole life insurance plans. Don't take anything for granted. In addition, research the insurance companies. Find out how long they have been in business and how fast their usual turn around is for pay-offs.

3. Compare from at Least Three Companies: You should be open to many life insurance quotes from different companies. Obtaining life term insurance quotes is easy, so you should shop around and find out what other insurance companies have to offer.

4. Start with the same set of questions: If you are looking out for different term life insurance quotes , the first thing you should take is that they belong for the same policy you are searching. There are some things that you should be clear with like, type of life insurance policy, time period for term policies, and the insured amount can all have a huge impact on a quote. It is important that you get the answers for these questions before you decide for your best life term insurance rate quote.

AUTHOR:Randell Rogfend is a father of three children who has had a long and fulfilling writing career. His passion is writing and he has contributed to countless newspapers, magazines and books. www.termlifeinsurancequote.ixvv.com/universallifeinsurancequotes The following site is his collection of articles about his latest interest: www.termlifeinsurancequote.ixvv.com